HomeBusinessFed's interest break was 'the right thing to do'

Fed’s interest break was ‘the right thing to do’

President Trump said on Sunday evening that the Federal Reserve was right to keep the interest rates unchanged during her policy meeting last week.

“I was not surprised,” he told reporters when he was asked to keep his response to the decision of the Central Bank to keep the loan costs stable after three consecutive rate reductions at the end of 2024.

“I think holding the rates at the moment was the right thing to do.”

Read more: Fed Rate decision: how this influences your bank accounts, loans, credit cards and investments

The new comments from the president about monetary policy came 10 days after Trump said he would “demand” lower rates.

It also coincides with a roll -out of its tariff plans for the largest trading partners in America who predict some economists and Fed Watchers will have an effect on the path of inflation and the tariff plans of the Central Bank.

President Donald Trump speaks on Sunday with reporters next to Air Force One. (AP Photo/Ben Curtis) · Associated Press

Trump said on the weekend that he was planning to levy 25% rates for all Mexican and Canadian goods from Tuesday (except a lower rate of 10% on the import of Canadian oil) and a rate of 10% on China.

On Monday he said that he was planning to pause the Mexican rates for a month after that country agreed to put 10,000 troops on the border to “stop the flow of fentanyl and illegal migrants”.

Some Fed Watchers said that the new rates that are outlined by Trump will push the inflation higher, which means that each percentage of reductions in 2025 are now off the table.

“The resulting increase in the American inflation of these rates and other futures measures will be even faster and be larger than we initially expected,” said Paul Ashworth, Chief Noord -America Economist for Capital economy.

See also  Dow, S&P 500 and Nasdaq decline while Nvidia slides

“Under those circumstances, the Fed window struck to resume the interest rates at any time in the next 12 to 18 months.”

The new developments “will probably” strengthen “the tendency of the Fed to be on the sidelines and to stay under the radar as much as possible,” JPMorgan Chief Economist Michael Feroli added.

A FED officer, president of Atlanta, Raphael Bostic, said on Monday that he wants to be “careful” when it comes to setting the monetary policy, since the amount of uncertainty is now greater than the end of last year.

President and Chief Executive Officer of the Federal Reserve Bank of Atlanta, Raphael Bostic speaks at the biennial conference of the South African Reserve Bank in the Cape Town International Convention Center, South Africa, 31 August 2023. Reuters/ESA Alexander
Federal Reserve Bank of Atlanta President Raphael Bostic. Reuters/ESA Alexander · Reuters / Reuters

“I really assume the attitude I have to wait, and there are many things that I will have to wait before I am sure I know which direction policy can go,” Bostic said in Atlanta.

“I don’t want our policy to lean in a direction and assume that the economy is going to evolve a certain way, but then I have to turn around and relax,” he added.

- Advertisement -
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments